20 August 2013

GMS weekly report on ship breaking industry for WEEK 33 of 2013:

Any hopes that a post Eid resurgence would see prices and sentiment push on in the Indian sub-continent recycling markets were dashed this week as both currency and local steel plate prices continued to defy onlookers.

The Indian Rupee hit vet another historical low of 62 to the US Dollar and spent much of the week trading in and around an unprecedented INR 61. In fact, local fears that a catastrophic 65 could be hit do not seem bevond the realms of possibility now, despite the best efforts of the Indian government to restrict the decline.

This has traditionally been a far quieter period of time in the Indian sub-continent recycling markets due to the monsoon season and the summer months bringing an altogether slower supply of inventory.

Furthermore, the opening half of the year, as has been the case for the first half of 2013, is usually a blur of activity with end buyers across the board filling their plots with a variety of vessels. The inevitable summer lull usually provides an appropriate breather for the industry.

Ramadan and Eid have also overlapped with the monsoon months to virtually bring to a halt, much of the activity in the Pakistan and Bangladeshi markets.

On top of this, local fundamentals in all sub-continent destinations have conspired to send sentiments and prices spiraling. Currencies in India, Pakistan and Bangladesh have depreciated significantly along with local steel plate prices - something that has led many end buyers to simply shut up shop and avoid offering until some greater stability is seen in the market.

The one bright spot concerns the China market - where price and demand finally appears to have picked up after almost one whole quarter in the doldrums. Hopefully this bodes well for the international market at large.

For the right units Chinese buyers are prepared to speculate well above market at impressive numbers almost comparative with sub continent levels.

For week 33 of 2013, GMS demo rankings for the week are as below:

Market Sentiment
USD 375/lt ldt
USD 410/lt ldt
USD 375/ltldt
USD 410/ltldt
USD 375/lt ldt
USD 410/lt ldt
USD 340/lt ldt
USD 350/lt ldt

Source: steel guru. 20 August 2013

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